NHAI fails to receive bids for 17 highway projects

For the first time after the economic slowdown, the National Highways Authority of India (NHAI) received no bids for 17 highway projects, raising concerns about revival in the road sector.

A total of 95 projects were put up for bidding by NHAI in the past year. In December 2008 when the global slowdown had hit the Indian market too, the state-run roads authority failed to get any response for 13 of the 60 projects it had put up for bidding. The lack of interest in bidding has also quashed the claims made by the road transport and highways ministry of solving the problems faced by the sector.

A senior NHAI official blamed the lack of interest on bidders finding the projects unviable. “No bid by private bidders proves that the projects are not viable at the current cost and so we are bringing down the cost by restructuring them,” the official said on the condition of anonymity.

NHAI is bringing down the cost by decreasing the number of bypasses, under-passes and decreasing the number of small bridges. “This will bring down the construction cost and make the project viable. We hope the projects will attract bids then,” said the official.

The industry, however, feels such project restructuring would not help. “The total cost of almost all the projects are up to 25 per cent less than the actual cost, thus making it difficult for the developers to bid,” said M Murali, director general, National Highway Builders Federation.

Instead of cutting on the design part, data of the total project cost and traffic should be made authentic so that banks did not hesitate in funding such projects, Murali added.

Under the Work Plan I, NHAI had to award 122 projects by June. Of these, 65 have already been awarded and bids for 13 others are being evaluated. Bids have been invited for three more projects, while the rest are under various stages of being put up for bid.

Work Plan I, made after Kamal Nath joined as the road transport and highways minister, is a list of projects under various phases of the National Highways Development Project.

On September 1, Road Secretary R S Gujral reviewed the progress of road projects and directed NHAI to expedite the award of projects. Each project was reviewed individually.